The Transitional CbCR Safe Harbour is included in the OECD Safe Harbour and Penalty Relief Guidance. Where it applies it deems the jurisdictional top-up tax to be zero.
Further amendments were made to the application of these Safe Harbour rules in the December 2023 OECD Administrative Guidance.
Jurisdictions implementing the GloBE rules are required to implement the Transitional CbCR Safe Harbour in their domestic legislation.
Key aspects of the Safe Harbour that need to be included in domestic legislation include:
| Safe Harbour & Penalty Relief Guidance | De Minimis Test |
| Safe Harbour & Penalty Relief Guidance | Simplified ETR Test |
| Safe Harbour & Penalty Relief Guidance | Routine Profits Test |
| Safe Harbour & Penalty Relief Guidance | Simplified Covered Tax defn (inc exclusion of uncertain tax positions) |
| Safe Harbour & Penalty Relief Guidance | Simplified ETR defn |
| Safe Harbour & Penalty Relief Guidance | Transition Period |
| Safe Harbour & Penalty Relief Guidance | Transition Rate |
| Safe Harbour & Penalty Relief Guidance | Definition of Qualified Financial Statements/Qualified CbC Reports |
| Safe Harbour & Penalty Relief Guidance | Special Rule for Joint Ventures |
| Safe Harbour & Penalty Relief Guidance | Special Rule for Tax Neutral UPEs |
| Safe Harbour & Penalty Relief Guidance | Special Rules for Investment Entities and their Constituent Entity-owners |
| Safe Harbour & Penalty Relief Guidance | Special Rule for Net Unrealised Fair Value Loss |
| Safe Harbour & Penalty Relief Guidance | Exclusions |
| December 2023 OECD Administrative Guidance | |
| 1 | Transitional CbCR – Purchase Accounting Adjustments (consistent reporting condition, goodwill impairment adjustment) |
| 2.2.1 | Transitional CbCR – JVs |
| 2.3.1 | Transitional CbCR – Same Financial Statements/Local Financial Statements for Statutory Reporting |
| 2.3.2 | Transitional CbCR – Using different accounting standards |
| 2.3.3 | Transitional CbCR – Adjustments to Qualified Financial Statements/Dividend Mismatches |
| 2.3.4 | Transitional CbCR – MNEs not required to file CbC Reports |
| 2.3.5 | Transitional CbCR – Qualified Financial Statements for PEs |
| 2.4.2 | Transitional CbCR – Treatment of Taxes on income of PEs, CFCs, and Hybrid Entities |
| 2.6 | Transitional CbCR – Treatment of hybrid arbitrage arrangements |
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